Quote of the Week

"Consider a turkey that is fed every day, Every single feeding will firm up the bird's belief that it is the general rule of life to be fed every day by friendly members of the human race 'looking out for its best interests,' as a politician would say. On the afternoon of the Wednesday before Thanksgiving, something unexpected will happen to the turkey. It will incur a revision of belief."

The Black Swan, Nassim Nicholas Taleb

"Pyramid of cards collapse?"

As we look ahead to next year, it is difficult to stray from debate on the economy as a focal point, particularly in light of the Madoff scandal.

Hedge funds are often described as black boxes, whereby investors entrust their hard earned cash to sophisticated investment managers and expect a healthy growth in return, without really understanding how it all works. A number of hedge funds have sold themselves by consistently outperforming the market, and although most have experienced a battering recently, many have fallen less than the market as a whole. The potential losses experienced in the Madoff scandal, however, are truly staggering, and I'm left wondering whether this just the tip of the iceberg? How many more firms like this are going to be found wanting during the global financial crisis?

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Merry Christmas
and a Happy New Year!

Thank you to all our readers for their support during 2008.

Best wishes, The EP Team